Currencies Daily Report

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1 Currencies Daily Report Powered by Karvy Forex & Currencies Pvt. Ltd. Wednesday 26 Jul 2017 Market Overview The Fed is widely expected to keep interest rates unchanged. Signs from the Federal Reserve as to when will they begin paring its massive bond holdings and a hint on the future rate hikes is what markets await today as the two-day meeting concludes. Meanwhile, US political jitters eased somewhat, after Senate Republicans voted to proceed to floor debate on their efforts to repeal and replace Obamacare. Asian stocks edged up early today after Wall Street indexes notched record highs. The Dollar Index tossed above the 13-month low as investors shifted focus on to the Fed's policy statement hoping to get some clues on the timing of its next monetary tightening. The Fed could hint at September as the starting date for reducing its balance sheet, many in the markets expect so. The Rupee today is seen opening around 64.42, slightly weaker to the close of yesterday and USDINR is expected to gain some momentum in the upside viewing speculations on the FED's outcome; the range being still intact. Greece successfully sold debt to private investors for the first time in three years on Tuesday, making a significant first step toward financial independence when its third international bailout ends next year. The deal came a month after euro zone finance ministers signed off on a new loan and sketched out measures to chip away at Greece's debt mountain after the current bailout finishes in August Greek Finance Minister Euclid Tsakalotos hailed the successful sale, saying it was "a beginning" and a sign of confidence in the country's economy. "There will be a second and a third (market foray), to approach August 2018 with confidence and emerge from the bailouts," he said. In the test run to ensure it will be able to rely on market funding next year, Athens sold 3 billion euros of new five-year bonds alongside a tender to buy back outstanding 5-year paper issued in That was to help lower its repayments in the years following the bailout exit. The deal did not attract as much demand as the country's brief foray into markets in 2014, but Athens paid less to borrow the same amount. Indices Last Close Previous Close % CHANGE NASDAQ DOW JONES NIKKEI HANGSENG Currencies Today Morning Yesterday at 05:00 PM % CHANGE DXY EURUSD GBPUSD USDJPY Today Morning Yesterday at 05:00 PM 0.45 % CHANGE USDINR Spot IRF

2 USDINR Intraday Outlook US dollar index is quoting at trading afloat from its 13-months low. Yesterday s Consumer Confidence was reported better than expected at against an expectation of 116.5, this has given some breather to the sluggish dollar overnight. And further the U.S dollar recovered from its 13 month s low on back of the news that the chances for President Trump still had time to push through his expansionary fiscal agenda. This after the U.S. Senate passed a motion to proceed on a repeal of the 2010 Affordable Care Act, which Republicans have vowed to undo. And looking forward today, key focus of the investor to be on the FOMC statement, where it is widely anticipated that the fed will keep the interest rates unchanged in today meet but the market participants would watch out for the clues on fed s plan on normalization of the Balance sheet where it earlier indicated it would start talking about tampering its QE in the September meet and pace of further rate hikes. After the disappointment in recent data from US economy such as inflation, retail sales as well as wage growth the markets would like to hear it from the Fed about further rate hike. Though, if Federal reverse continue its hawkish tone in the statement the investors would also need supportive US economic data along with it, to believe the seriousness about further rate hikes from the Fed. And coming to economic reports we have New Home Sales scheduled to be released but the focus to largely remain on the July FOMC statement. This is the daily chart of USDINR, the pair has traded in the range of on the downside and on the higher side, the pair has been trading side wise for almost a month,and few days back tried to expand but finding resistance near 50DMA near levels, the pair until breakout of is likely to consolidate and today likely to trade in a range of Sideways - Bullish BUY USDINR FUT TGT SL S3 S2 S1 Pivot R1 (Futures) R R Importers Strategy July Exports partially hedged at on Spot Imports hedged partially at on Spot. Pending imports booked around Spot

3 EURINR Intraday Outlook EURO is trading at , after hitting 2 and ½ year s high against US dollar in yesterday s session. Better than expected German economic data along with as weaker US dollar helped the euro to test above 1.17 levels. The German Ifo business climate index came in at against an expectation of while Business Expectations rose to against a forecast of Despite the prospect of a rate hike and the consequence of a stronger euro the German businesses are euphoric and the company s satisfaction with their current business situation reached its highest level since Germany's reunification. Their shortterm business outlook also improved. The survey suggested that the German economy would rose ahead. As well as weakness in US dollar against major currencies came in ahead of yesterday senate decision about the undoing the Obamacare Act kept the under pressure and the same has also helped the EURO to touch the 2 and ½ years high at in yesterday s session. Post that the dollar bounced back on news about healthcare as well as on better than expected US data due to which EURO has also witnessed some profit booking. Looking ahead in terms of economic data we have no major reports due to be published but we have ECB's Lautenschlaeger scheduled to speak. Even the focus would also be on the FOMC meet later this day. Coming to the view, in near terms we prefer buying the Euro on dips with targeting This is the daily chart of EURUSD the pair trade in a broader range on the lower side and continued its trending move on the upside after some consolidation, the pair has given a strong breakout above and since then had a strong move, now with MACD indicator remaining on the buy side short to medium term traders can utilize any dips to go long intraday likely to trade volatile. Bullish BUY EURUSD TGT SL BUY EURINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) Importers Strategy July Exports partially hedged at on Spot. Pending exports booked at levels on Spot. July Imports to be partially booked at Spot

4 GBPINR Intraday Outlook Pound is trading at after being topped at in yesterday s session. There were no major economic reports published in yesterday s session which has helped the Pound to trade higher the only reason was because of the weakness in US dollar against major currencies came in ahead of yesterday senate decision about the undoing the Obamacare Act kept the under pressure and the same has also helped the Pound to surge above the mark. Post that the dollar bounced back on news about healthcare as well as on better than expected US data due to which Pound has also witnessed some profit booking. Looking ahead today we have UK s Q2 GDP figure to be on the tap where the expectations are set at 1.7% year-on-year and the same was reported at 2.0% previous time. The data is anyways expected to be negative compared to the previous time after looking at recent disappointment in UK s economic data, but if the data comes in better than expected in any chance we can expected Pound to trade above 1.31 mark. This is the daily chart of GBPUSD pair the pair traded in the broader range of on the higher side and on the lowerside, the pair had a volatile session last trading day and the pair is trading in a upward sloping channel with short term resistance near 1.31 and support comes at 50DMA at so likely to trade in this broader range for coming session still shorter term traders can utilize dips to enter longs. Bullish GBPUSD TGT SL BUY GBPINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) July Exports partially hedged at on Spot Importers Strategy July Imports partially booked at & All pending imports to be booked targeting 82.50

5 JPYINR Intraday Outlook USD-JPY is trading at after hitting the lower levels of in yesterday s session the key reason for t\yen s appreciation in yesterday s session was because of the weakness in US dollar against major currencies came in ahead of yesterday senate decision about the undoing the Obamacare Act kept the under pressure and the same has also helped the Japanese Yen to appreciate in yesterday s session. Post that the dollar bounced back on news about healthcare as well as on better than expected US data due to which Yen has also witnessed some profit booking. Bank of Japan Deputy Governor Hiroshi Nakaso who spoke yesterday said that wages have been slow to rise because some companies in the services sector are shortening their business hours instead of hiring more workers. He also said wage growth also has been capped as some companies invest in labor-saving technology, such as self-checkout machines. Looking ahead the key focus would be on FOMC meeting where the fed is expected to talk about balance sheet normalization in September meet. If fed keep the markets happy we can expect the USD-JPY pair to test This is the daily chart of USDJPY pair, the pair traded in a broader range of on the downside and on the higher side, the pair had made a morning star kind of pattern near a support of trend line signifying demand at lower levels but going ahead on the higher side strong resistance near 113 so likely to see some supply at higher levels but intraday likely to act as a pivot for the day. Bearish Buy USDJPY TGT SL SELL JPYINR FUT TGT SL S3 S2 S1 Pivot R1 R2 R3 (Futures) July Exports to be partially hedged targeting on Spot Importers Strategy July Imports partially booked at & on Spot. Next tranche to be booked targeting

6 Time Currency Data Forecast Previous 2:00 PM GBP 0.3% 0.2% 7:30 PM USD 615K 610K 8:00 PM USD -3.3M -4.7M 11:30 PM USD Economic Data for the Day Prelim GDP q/q New Home Sales Crude Oil Inventories FOMC Statement Federal Funds Rate USD <1.25% <1.25% Report prepared by: Siddhesh Ghare Deepak Agarwal Shashank Damaraju Head Office Karvy Millennium,Plot No 31, Financial District, Gachibowli, Hyderabad T: / 6635 Corporate Office 131, Andheri Industrial Estate, Off Veera Desai Road, Andheri (W), Mumbai T: , Mob No Disclaimer: The information and analysis contained in this document come from sources believed to be reliable and our own internal research; however, no representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of this information. Nothing contained in this publication shall constitute an offer to sell/purchase or an invitation/ solicitation to do so for any currency, security, commodity or equity. Karvy Forex & Currencies Pvt. Ltd. accepts no liability whatsoever for any loss, howsoever arising, from any use of this document, its contents or otherwise arising in connection therewith.no part of this document can be circulated or reproduced in any form without prior approval of Karvy Forex & Currencies Pvt. Ltd.